If you???re a classic small-government conservative, rising distrust of politicians is consistent with the Reaganesque ???government isn???t the solution, it???s the problem??? message.

I can see the logic, but it just hasn’t happened. There doesn’t seem to be any relationship between trust in politicians and attitudes on the size of government. For example, in the Roy Morgan series of polls on the ethics and honesty of various occupational groups, politicians have consistently done badly. Last year just 15% of voter rated them highly for ethics and honesty. And would we trust such rogues with our money? Yes! 68% of us would rather the politicians spend the surplus than give it back to us so that we can spend it ourselves.

The Roy Morgan survey is a bit demanding, wanting high or very high ratings. A better question has been asked in the Australian Election Survey, which asks whether people in government are looking after themselves or whether they can be ‘trusted to do the right thing nearly all the time’? With both ‘usually can be trusted’ and ’sometimes can be trusted’ options, in 2004 40% of respondents thought the politicans could at least sometimes be trusted. But that still leaves quite a few people who seemingly think that politicians are unstrustworthy and that they should spend surpluses rather than give them back.

Why has this happened? One theory, which I have advanced in Catallaxy posts that are inaccessible due to their server problems, is that the claimed distrust of politicians is a bit of a pose; a cliched response to questions about trust, but not actually an operational assumption when people think about politics. We can see this in higher trustworthiness ratings for specific politicians than politicians in general, and arguably it is showing up here as well.Continue reading “Could political distrust lead to small government?”→

Catallaxy is my biggest source of referrals, so I presume we have quite a few overlapping readers who will have noticed that it has been down, with server problems apparently. It’s now back in very primitive form, without any substantive posts yet or its archive (I hope that is recovered – my posts here would be even longer than they are if I could not link back to old posts that support elements of my argument). But Tom seems hopeful that things will be back to normal soon.

THE so-called Nelson reforms appear to have undershot their potential to fill university coffers, with local undergraduate fee-paying places earning universities just $103.7 million, or 0.7 per cent of revenue, in 2005, the first year in which looser regulation of local fee places took effect.

I’m not so sure that this is the right take on 2005’s finances. On my calculations, up-front revenue from Australian full-fee undergraduates is up a healthy 9.8%, but this is not counting the people who deferred their payments through the FEE-HELP loans scheme, which was the most important element of the Nelson reforms. This is where it gets hard to work out what is going on, because FEE-HELP covers both undergraduate and postgraduate fee-payers.

However, we can take an educated guess. FEE-HELP’s predecessor, PELS, was available only to postgraduates. FEE-HELP lending in 2005 was 21.7% higher than PELS lending in 2004. We already know from aggregate enrolment data (pdf) that postgraduate enrolments overall were stable. This suggests that most of that lending growth was in the undergraduate market. It’s possible that undergraduate full-fee revenue is in fact up by 40% or more.

Another aspect of the financial data pointing to growth in the undergraduate full-fee market is the surprisingly low growth in revenue from Commonwealth-supported students. On my calculations, it is only 3.1%. Given that this was the first year of the 25% increase in student contributions that many universities imposed (though only to commencing students), and that there was normal indexation (about 2%) on students from previous years, it should have been more.

The only ways I can think of to explain this are that the total number of Commonwealth-supported students was down and/or there was some shift in the discipline mix toward lower-revenue places. I think the former explanation is likely to be the main one as we know that total undergraduate enrolments increased by just .9%.

My interpretation: Commonwealth-supported undergraduate enrolments actually went down for the third year in a row, and all the growth was generated in the full-fee market. As has been the case for a number of years, the private education market is propping up the dysfunctional public higher education system. Little wonder the government seems to be endlessly stalling releasing the full student enrolment data that would tell us what is really going on.

It’s common enough in right-of-centre circles to laud the economic reforms of the 1980s. A new publication from the Institute of Public Affairs, Australia Since the 1980s, is in this tradition. Its opening paragraph tells us that it is

worthwhile revisiting the last great period of reform – the 1980s.

Certainly, there were some worthwhile reforms in the 1980s: the floating of the dollar, the opening up of the financial system, and the start of phased tariff cuts among them. Yet as with some other recent IPA excursions into history (here and here), this claim doesn’t quite stack up.

The 1990s, and especially their first half, have a better claim on being the last great period of reform: the end of the two airline policy, the end of the one phone company policy, improved competition policy (admittedly, a point of dispute among liberals), more phased tariff cuts, all the major privatisations, the most significant industrial relations changes, and many other less high-profile reforms. This Industry Commission publication gives a useful timeline from the 1970s to 1997.

So why do people keep talking about the 1980s as the period of reform? There are several possible explanations. It was certainly the start of a major period of reform, the unravelling of the ‘Australian Settlement’ that had governed economic policy since the first decade of the 20th century. And arguably it is a little artificial to distinguish between the two decades; the ‘1980s’ can be used figuratively to refer to later, related periods too (just as some of the important trends of the ‘1960s’ peaked in the first half of the 1970s).

But I think there could be other reasons relating to the culture of the right. The 1980s was the time when the right was on the intellectual offensive, and the left shell-shocked. In Australia, they simply weren’t used to the right having a specific programme of reform. In 1987, an edited collection from various Labor and left figures, The New Right’s Australian Fantasy, said on the back cover that its contributors ‘feel strongly about the need to safeguard what is best about this place.’ The left being reduced to a conservative argument like this was something few people would have predicted 15 years earlier, when the left’s time seem to have come. This first phase of economic reform, superbly recorded in Paul Kelly’s The End of Certainty, was as exciting for the right as it was depressing for the left.

Though the reform programme continued even more quickly in the 1990s, the political dynamic changed. The dreadful early 1990s recession gave the opponents of economic reform a plausible (if wrong) argument that the economic reform programme was a failure, and vocal opposition arose from conservatives as well as leftists. The Paul Keating Prime Ministership also divided the right. Many pro-economic reform cultural conservatives hated his non-economic agenda so much that they could barely give him credit for the good things he was doing. And then he defeated Liberal leader John Hewson and his radical reform agenda Fightback! in the 1993 election. The reform movement didn’t die with Fightback!, but it marked the end of manifesto politics. So while the 1990s were important years for economic reform, they didn’t feel as good as the 1980s had.

Surveys suggest that people tend to look back fondly on their years of early adulthood, and I think the same might be true of political movements as well. The future remains an exciting possibility, free of the messy realities of trying to make things work. This is why the free-market right views the ‘1980s’ with nostalgia. But we should not pretend that these memories are accurate history.

In his paper on ethnic diversity and interpersonal trust, Andrew Leigh remarks that:

‘At the very least, trust appears to be a useful proxy variable for a variety of outcomes that are important to economists.’

And not just economists. But the note of caution in this statement is warranted. We can, I think, say fairly confidently that high levels of stated interpersonal trust are likely to be a good thing, but that lower levels are ambiguous – they might be a sign of trouble, but there are other possible interpretations.

One reason is the wording of the question. In the survey Andrew used, the 1997-98 Australian Community Survey, he coded as ‘trusting’ people who disagreed with the statement ‘generally speaking, you can’t be too careful in dealing with most Australians.’ That’s a common wording in the surveys on trust, but it seems to force people into a trust/don’t trust choice, precluding more nuanced responses. Trust/distrust is more like a continuum from naivety to paranoia about others than a simple choice between one or the other.

We can see the effects of more nuanced answer options in the 2005 Australian Survey of Social Attitudes (available here, though it is a user-unfriendly website). It has the same wording as the ACS, except that ‘Australians’ is replaced with ‘people’. Only small proportions are naive or paranoid – 2% saying that people can almost always be trusted, and 5% saying ‘almost always’ you can’t be too careful. 52% chose ‘people can usually be trusted’, and 39% ‘usually can’t be too careful’. The year before, in the Australian Election Survey, a simple two-choice answer option (though with a slightly different question ‘most people’, rather than ‘people’) saw 53% go for the negative response, compared to 44% in the social attitudes survey. Possibly offering a more qualified ‘trusting’ option improves apparent trust levels.

The broader problem with this question is that in practice trust is contextual, and so we are usually dealing with a narrower set of circumstances and persons than ‘Australians’ or ‘people’ in general. Other polling shows that we are more trusting when we are asked about a specific person or group of persons than asked very general questions. For example, we tend to rate specific politicans more highly for trustworthiness than politicians in general; we claim not to have confidence in banks in general, but all the individual banks have mostly satisfied customers – and who thinks that the banks will steal their money?

Because trust is contextual, I’m not at all sure how I would answer the more general question about trust. Would I leave my apartment door unlocked or post my PIN on my blog? No, I wouldn’t. Would I invest my savings in a get-rich-quick scheme? Again, no. So I do not believe that people can always be trusted. But I trust shops not to rip me off and not to serve me contaminated food, even if I have never been to them before and will never go to them again. I buy things on the Internet from foreign countries. I’m almost never concerned about my personal safety. So while I know there are untrustworthy people around, I am also confident that I can avoid them in my daily business. This enables me to act as if people are trustworthy.

Saying that people can usually be trusted in answer to these poll questions means, I think, that those respondents trust the people they need to deal with. But responding negatively does not necessarily mean a respondent is completely untrusting. They could be trusting in some contexts, but not others. So if ethnic diversity causes fewer people to express trust in general this may not be much of an issue, if they still have trust where that is useful in reducing monitoring and enforcement costs. The intriuiging aspect of Putnam’s latest research, as Andrew Leigh noted, is that he seems to be suggesting that in diverse cities people are less trusting of their own ethnic group as well as other people. It will be interesting to see more evidence on that.

My solo blog is one month old today. I’m reasonably happy with the way it’s going – I’ve enjoyed writing it, there have been some excellent comments, nobody has breached the comments policy (though one person came close), it has prompted some discussion at other blogs, and I have been able to use posts in the media. The daily page views could be higher – averaging 247 a day since I started, though the navel-gazing of the last few days seems to have produced a bit of a surge. But it’s early days yet, and with a Technorati rank of 173,201 I’m ahead of about 56.6 million of the other blogs they claim to be monitoring.

But one thing I don’t like is the look of the blog, which is boring, and the fact that I can’t get the comments sidebar to work. If anyone can recommend someone to redesign it for a reasonable price I’m interested in hearing suggestions. I can be contacted via andrew AT andrewnorton.info

His extensive research found that the more diverse a community, the less likely were its inhabitants to trust anyone, from their next-door neighbour to their local government. People were even more wary of members of their own ethnic groups, as well as people from different backgrounds.

Now this in itself is hardly suprising. It is intuitively plausible, since the less you know or can infer about someone, and the less you are able to deliver social sanctions through social networks, the less rational it is to trust them. Andrew Leigh (who has worked with Putnam in the past) has already written a good study of it, reporting some international empirical work and adding Australian evidence. This story should just have been telling us that we were about to get some interesting extra detail. But instead it suggests that Putnam himself should be treated with some intellectual distrust.

Over the past 10 years of John Howard’s Government, the personal income tax burden in Australia had risen from 11.7 per cent to 12.6 per cent of GDP.

It does note that these figures are for 2004, before the 2005 and 2006 tax cuts. These cuts should bring the percentage of GDP take back to around the earlier figure, though because of rising GDP spending per person will continue to grow.

Many people have criticised the Howard government’s taxing and spending record – Des Moore’s latest critique should be on the Policy website in the next few days. I’ve been writing another for the Summer issue, focusing on the expenditure side to see just what went wrong.

What’s particularly interesting is the biggest spending area, welfare payments. Though the long economic boom should, in theory, have lessened demands on the welfare system, in fact real per capita spending in the three years ending 30 June 2005 (the latest from the ABS) increased by more than in the last three years of the Keating Labor government.

Partly, this is due to the ageing of the population. We are supporting 20% more aged pension beneficiaries now than when Howard came to office. No government can do much about these trends in the short term (though there have been fiddling at the margins policies designed to encourage people to stay in work longer).

But what really struck me was that large amounts of money are being spent because the Prime Minister, despite being a hate-figure on the left, is actually something of a social democrat, albeit of a conservative kind.

Our social cohesion, flowing directly from a quite unique form of egalitarianism, is arguably the crowning achievement of the Australian experience over the past century. Yet this cohesion will be tested if wealth and opportunity can

I’ve never won any competition I entered, but now it seems I have won a competition I did not know I was in: I have been named as one of Australia’s top libertarian identities. Don Arthur thinks that surely there must have been some mistake, citing these words I wrote last year explaining why I was not a libertarian:

Classical liberals are certainly at the libertarian end of the political spectrum. In practice, though, I am uncomfortable with the label. Libertarians tend to have a rights-based view of the world (in this they parallel modern left-liberals, though their lists of rights are different). Personally, I don’t find rights theories or, for that matter any foundationalist theory, convincing. So while I favour the institutions of classical liberalism – limited government, the rule of law, protection of personal freedoms, the market etc – I have an more intellectually eclectic set of justifications than a simple assertion of rights. In practice, this leads to more pragmatic political positions than libertarians.

For example, while maintaing due scepiticism I basically agree with the line that Gerard Henderson has been pushing (eg today???s SMH) that in times of threat the government can reduce some people???s civil liberties if a strong enough case can be made that they are a threat to Australia???s security. In the libertarian view, rights are rights, regardless of circumstances.

Jason Soon thinks that in this passage I am defining libertarianism too narrowly as a rights-based philosophy, when it could have utilitarian derivations as well:

On that reading, Friedrich Hayek and Milton Friedman wouldn???t be classified as libertarians, nor would Friedman???s son, David Friedman who is fundamentally a utilitarian but has also written one of the most convincing books on anarcho-capitalism that I have ever read

John Humphreys agrees with Jason. He thinks that:

If somebody really wanted to make a distinction between ???classical liberal??? and ???libertarian??? it is probably fair to note that ???classical liberals??? are normally on the moderate corner of the libertarian circle (sic), but that doesn???t stop them from being libertarian.

If libertarianism and classical liberalism are not identical twins they are at least first cousins, which is why classical liberals can end up appearing like ‘moderate’ libertarians. Yet I still think that there are some distinctions that often if not always apply, and mean I am more comfortable self-describing as a ‘classical liberal’:

1) Underlying philosophy. Jason insists that libertarianism can rely on utilitarian as well as rights-based arguments. I think he is right that libertarians use utilitarian arguments, but I feel more to find stronger justifications than natural rights theories for the same freedoms as rights protect than as a real inquiry into what would maximise utility. Libertarians end up arguing against things like seat belt laws, random breath testing or gun control, which I think are tough arguments on utilitarian grounds alone. I think classical liberals tend to be more open to going where utilitarian arguments might take them, which is why I made the point about national security laws in the passage that Don quoted.

2) Style. Whether utilitarian or rights-based in their underlying philosophy, libertarians like deductive reasoning – applying clear principles to almost any set of facts. This is one reason, I think, that neo-classical economics and libertarianism often appeal to the same people. Deductive reasoning gives libertarianism a dogmatic character (the Randians tend to be insufferably dogmatic). Early classical liberals like Adam Smith preferred inductive reasoning; the pleasure in reading them (and talking with living classical liberals) is not just in having aspects of one’s worldview confirmed, it is in trying to find patterns and meaning in social and economic life. Where libertarians have solid principles, classical liberals have rules of thumb derived from experience: governments tend to mess things up, individuals are the best judges of their own interests, private property is essential to freedom and efficiency, etc.

3) Cultural attitudes. Libertarians tend to have a more anything goes attitude to culture than classical liberals. In this respect, classical liberals have things in common with conservatives, in believing that social order is desirable and that certain general cultural rules ought to be observed. Libertarians rush in to defend people’s freedom to say anything they like, no matter how racist, sexist, homophobic, etc. I’ll certainly argue against people who say such things being punished by law, but I don’t necessarily see anything wrong with them being ostracised for their actions. This is why I was not completely against ‘political correctness’. It is why I have a stricter comments policy than Catallaxy.

Political ideologies are very hard to pin down, and inevitably people will find exceptions – or even take exception – to my attempts to distinguish classical liberalism and libertarianism. But I have described the connotations attached to the two terms in my own mind at least. I have been called much worse things than a ‘libertarian’ – indeed, a radical libertarian once accused me of ’state worship’, which I found far more inaccurate and insulting. But given the choice, I prefer the label ‘classical liberal’.

believes Australia needs sex vilification legislation to curb the proliferation of degrading and offensive images of women in the media and on television. “The one thing that unites a broad spectrum of women, from the very conservative to the very radical, is that they all hate sexual vilification, whether it is in advertising, TV or in magazines and newspapers. “And they all want something done about it,” she said.

But I am not sure that these ‘degrading’ images ‘ constitute anything like the racial vilification to which she compares them. The Victorian legislation on the subject states:

(1) A person must not, on the ground of the race of another person or class of persons, engage in conduct that incites hatred against, serious contempt for, or revulsion or severe ridicule of, that other person or class of persons.

But do any images of women incite hatred, contempt, revulsion or severe ridicule of women in general (a ‘class of persons’)? I think that’s unlikely. There are so many different images of women, from real life as well as the media, that at most we might form an image of ‘that other person’ – but even then, we probably would not, because we know that she is just being paid to do whatever ‘degrading’ thing she is depicted as doing. And if it is degrading of ‘that other person’, who do we charge, given that the ‘degraded’ person was in all probability willingly involved? Shouldn’t she, rather than Ms Goward, be the judge of whether she has been degraded or not?

And what about men? ‘As a man’ (to paraphrase the feminists) it would never occur to me that depicting ‘degrading’ scenes of other men was degrading to men generally. Perhaps Mark Latham’s ‘metrosexual knobs and toss bags’ are more sensitive, though I doubt it. Or maybe Latham would face Ms Goward’s vilification tribunal for his remarks?

The idea of sex vilification becomes even less plausible when we look at the examples given in The Age’s editorial:

while it is illegal to refuse to employ a woman purely on the grounds she is “a dumb blonde”, it is perfectly legal to display a billboard with a blonde bursting out of a bikini (or, for that matter, a a man bulging out of a loincloth: vilification goes both ways).

But images like this are not designed to incite hatred, contempt, revulsion or severe ridicule. They are designed to incite lust, or perhaps simple appreciation of physical beauty. The Age‘s views are closer to the Taliban’s notion that men cannot control their sexual desires and women must therefore be covered from head-to-toe than those of a once ‘progressive’ newspaper.

Goward’s claim turns more on the fact that she personally – and other women she claims to speak for – finds some images of other women offensive. But even the overkill racial and religious vilification law doesn’t give us a right not be to offended. That falls into a different area of the law – old-fashioned censorship. And John Howard is accused of wanting to take us back to the 1950s…